California’s Unfair Competition Law (“UCL”), Business & Professions Code Sec. 17200, was designed to protect competitors and consumers from illegal, fraudulent, and “unfair” business practices, and Business & Professions Code Sec. 17500 prohibits false advertising.

Until 2004, however, individuals or groups that never suffered any loss or harm could sue on behalf of the “general public” without satisfying traditional class action requirements. Additionally, the statute’s pleading requirements and standards of proof were very liberal and allowed recovery, sometimes on representative basis, upon a determination that the challenged conduct was “unfair” or “likely to deceive a reasonable consumer,” without any proof of actual injury. The lack of formal class action requirements also meant that UCL judgments bound only the named plaintiff and not the “general public” they purported to represent, raising the very real prospect of repeat liability for the same conduct.

California’s voters responded to these problems by passing Proposition 64 in November 2004, implementing important procedural changes to Section 17200 and Section 17500, benefiting large and small businesses that do business in California. Proposition 64 now requires that plaintiff show he or she has suffered an actual injury and has lost money or property as a result of such unfair competition. Proposition 64 also cross-references California’s class action statute, which means that all representative actions under Section 17200 or Section 17500 must meet regular class action requirements.

The first major issue confronted by California courts after Proposition 64 passed was whether its new requirements applied to UCL cases already pending when the initiative passed. The California Supreme Court issued two opinions on July 24, 2006, Californians For Disability Rights, 39 Cal. 4th 223 (2006), and Branick v. Downey Savings & Loan Assoc., 39 Cal. 4th 235 (2006), resolving this issue in favor of applying Proposition 64 to all cases already on file when the initiative took effect (on November 2004).

Next, the California Supreme Court issued In re Tobacco II, 41 Cal. 4th 1257 (2007) regarding the impact of Proposition 64 on UCL claims filed on behalf of a putative class in a case involving the propriety of certifying a UCL class action for Californians who claimed tobacco company advertising regarding terms like “lights” and “low tar” was misleading about health hazards and addictiveness. The decision has received a fair amount of criticism as subverting Proposition 64’s goal of limiting the UCL, as the Supreme Court in In re Tobacco II confined Proposition 64’s standing requirements to named class representatives only.

At the same time, the case affirmed the broad discretion trial courts have to deny class certification, and it did not purport to alter or change the substantive elements required to prove a UCL claim. The In re Tobacco II majority also recognized that the right to restitution under section 17200 depends on whether any money or property “may have been acquired” as a result of the alleged misrepresentation, and other cases confirm that even under the UCL, restitution can only return to a person those measurable amounts which are wrongfully taken by means of an unfair business practice.

Although providing some guidance, In re Tobacco II did not resolve all questions about Proposition 64 and the new UCL requirements, and UCL cases continue to present novel issues that are heavily litigated.

Use Of The CLRA As An Alternative To UCL and False Advertising Claims

Because Proposition 64 was a significant step toward leveling the UCL playing field, some plaintiffs’ attorneys have turned to another California statute, the Consumer Legal Remedies Act (“CLRA”), California Civil Code Section 1750 et. seq. This statute raises problems of its own.

The self-declared purpose of the CLRA, enacted in 1970, is to “protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection.” Cal. Civ. Code § 1760.

Unlike the UCL, the CLRA contains no general broad proscription against “unfair” or “deceptive” practices. Instead, the CLRA lists 23 activities as “unlawful” – from “advertising goods or services with intent not to sell them as advertised” to “inserting an unconscionable provision in [a] contract” to “representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have.” When a prohibited activity takes place during a “transaction” involving the sale or lease of goods or services to a “consumer,” CLRA liability may result. Cal. Civ. Code § 1770(a).

Only individual consumers can sue under the CLRA, although they may bring a class action “if the unlawful method, act, or practice has caused damage to other consumers similarly situated.” Cal. Civ. Code § 1781(a). Unfortunately, at least one court has interpreted this provision as requiring “mandatory” class certification if a plaintiff can establish the requisite conditions, such as the impracticability of bringing all members of the class before the court, commonality, typicality, and adequacy of representation. Hogya v. Super. Ct., 75 Cal. App. 3d 122, 140 (1977).

In addition, the CLRA contains some unique procedural devices. First, the plaintiff must notify a defendant of the alleged Section 1770 violations thirty or more days before the filing of a CLRA complaint. See Cal. Civ. Code § 1782. The 30-day letter is required as a condition precedent to maintaining an action for damages under the CLRA. Cal. Civ. Code § 1782(b).

Second, the CLRA prohibits courts from granting a motion for summary judgment, although it does provide a process by which a defendant can make a motion that the given action has no merit. Cal. Civ. Code § 1781(c)(3).

The remedies available under the CLRA also differ from those allowed under the UCL. The CLRA allows for actual damages, punitive damages, injunctive relief, restitution, ancillary relief (“any other relief that the court deems proper”) — and attorney’s fees. Cal. Civ. Code §1780(a)(1)-(5). In order to obtain actual damages, however, a CLRA plaintiff must prove loss causation. See Wilens v. TD Waterhouse Group, Inc., 120 Cal. App. 4th 746, 754 (2003) (“Relief under the CLRA is specifically limited to those who suffer damages, making causation a necessary element of proof”).

Before Prop. 64 was enacted, few plaintiffs asserted CLRA claims because the UCL provided so much flexibility and so many advantages. Since Prop. 64 helped level the UCL playing field, it appears there has been an increase in the number of CLRA claims asserted.

But the CLRA remains more limited than the pre-Proposition 64 version of the UCL. In January 2009, the California Supreme Court issued an important CLRA decision, Meyer v. Sprint Spectrum L.P., 45 Cal. 4th 634 (2009) unanimously affirming judgment for Sprint and concluding that a CLRA plaintiff lacks standing “without some allegation that he or she has been damaged by an alleged unlawful practice.” Sprint was represented in the California Supreme Court by Reed Smith’s own Ray Cardozo and Dennis Maio..

Meyer began in early 2004 with allegations, on behalf of the general public, that Sprint violated the UCL by including mandatory binding arbitration and other provisions in its customer service agreements. After Proposition 64, the original plaintiff (who was not a Sprint customer) was replaced by new named plaintiffs, and CLRA and declaratory relief causes of action were added. Sprint challenged the amended complaint because even the new plaintiffs had not alleged that the contract provisions had been enforced against them, and they also did not allege that they were personally damaged by the provisions. Although plaintiffs argued that the CLRA imposed no damage requirement whatsoever, the court concluded that California’s Legislature had “set a low but nonetheless palpabale threshold of damage.” It also noted that with statutes like the UCL and CLRA, “any rule that would expand the ability of individuals to bring lawsuits has costs as well as benefits.” There is little to say other than that Meyer is a sound and well-reasoned decision that provides important and clear guidance for future CLRA claims.

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 19, 2019 Is a Homeowner’s Appeal Moot Upon the Sale of Foreclosed Property? — Another […]

WAPO- The grass got long. Jim Ficken knows it. But was it so long that he should have to pay the city of Dunedin, Fla., nearly $30,000 and lose his home to foreclosure? Ficken, for one, would rather ask a judge. The 69-year-old retiree is now at risk of losing his home because he doesn’t […]

Consumer Financial Services LAW MONITOR- On April 29, New Jersey’s governor signed into law bill A4997, known as the Mortgage Servicers Licensing Act. As the title indicates, the Act creates a licensing regime for servicers of residential mortgage loans secured by real property within New Jersey. As with many state licensing regimes, the Act exempts most ban […]

Pamela Mosley was just starting a new business when she was diagnosed with breast cancer. Unable to work for the next 13 months she fell way behind on her mortgage payments and was about to be foreclosed on. WFMYNEWS2- Pamela Mosley is the type of person who does things, anything and everything. Mosley has three […]

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 12, 2019 Foreclosure Workshop #74: Validity Versus Falsity — Proven Successful Ways in Which Homeowners […]

Lexology- On April 29, the New Jersey governor approved several bills related to mortgage lending in the state. According to a press release issued by the governor, the package of nine bills addresses the state’s foreclosure crisis and includes the following: A 4997, known as the Mortgage Services Licensing Act, requires persons who act as mortgage servicers […]

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . Sunday – MAY 5, 2019 Foreclosure Workshop #73: Wells Fargo Bank v. Prentice – Highlighting Another Emerging Challenge […]

It seems nothing gets a judge angrier than being challenged on the court’s misconception of law. In 42 years of trial experience my conclusion is that sometimes you need to risk veins popping in the neck and even contempt citation to get your point across. Yet in the heat of the moment it is easy […]

Editors; Note: Everyone looking for an attorney should listen to this show. Every lawyer thinking about turning down or accepting a case involving foreclosure defense should listen to this show. Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Charles Marshall Call in at (347) 850-1260, 6pm Eastern Thursdays Charles Marshall is on […]

Until this decision I had assumed that Qui Tam actions were essentially dead in relation to the mortgage meltdown. Now I don’t think so. The question presented is whether actions brought by a private person acting as a relator on behalf of a government entity can bring claims for damages under the False Claims Act. […]

In response to my blog post last week about whether there might be causes of action for royalty or other damages or offset arising from the fact that the loan is actually a small part of a much larger group of transactions in which the borrower is a party but not a participant in profits, […]

New York State Judge Arthur Schack passed away on May 2nd, aged 71. As phrased by “Summer Chic” “he was nothing short of a mensch which, in Yiddish, is an honorific not bestowed lightly. “His life was a testament to compassion; evidenced during his sixteen years on the bench in Brooklyn’s State Supreme Court and, […]

It’s easy to blame borrowers for loans that are in “default.” The American consensus is based upon “personal responsibility”; so when a loan fails the borrower simply failed. But this does not take into account the hundreds of millions of dollars spent every year peddling loans in the media and the billions of dollars paid […]

Listen to Show Click Here: http://www.blogtalkradio.com/neilgarfield/2019/05/16/escape-from-bankster-fraud—case-study-in-the-wamu-chase-fraudulent-scheme Hello, Neil Garfield here and this is Thursday April 25, 2019. Tonight, with the help of my guest Stephen Renfrow, we are going to take a closer look at the whole fraudulent scheme surrounding the false cla […]

Banks should be intermediaries, not the principals in a transaction. If you write a check your bank is not buying the TV. Original documentation and actual facts clears everything up. But what happens if original documentation disappears like it did in the mortgage meltdown? We are left at the mercy (nonexistent) of the banks who […]

“While overall foreclosure activity is down nationwide, there are still parts of the country where we may need to keep a close eye on,” said Todd Teta, chief product officer at ATTOM Data Solutions. “For instance, Florida is seeing a steady annual increase in total foreclosure activity for the 8th consecutive month, which is being sustained by a constant […] […]

Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Neil F Garfield Call in at (347) 850-1260, 6pm Eastern Thursdays Tonight’s guest is Stephen R Renfrow, born 1957 in Louisiana. He graduated with Honors from Louisiana Business College and Bakers Professional Real Estate College. He has extensive experience in Banking and Real Estate […]

LivingLies is still LivingLies Livinglies.wordpress.com=Livinglies.me Millions of people use LivingLies as a resource for considering foreclosure defenses, new laws and even law enforcement. A few weeks ago I added PureChat for people to ask direct questions. The Chat function is located at the bottom right of your computer screen. I usually respond fairly q […]

Please address comments suggestions, case law and statutes to the following email address: NeilFGarfield@hotmail.com I am currently looking at a few new strategies. I will briefly outline them here not as recommendations but as possibilities that I think deserve exploration. As part of the collaborative effort of the LivingLies blog started in 2007 I am […] […]

References to sales of loans and servicing rights are usually merely false assertions to distract homeowners and lawyers from looking at what is really happened. By accepting the premise that the loan was sold you are accepting that the loan was (a) real and (b) owned by the party who was designated to appear as […]

NOTE: This case reads like law review article. It is well worth reading and studying, piece by piece. Judge Marx has taken a lot of time to research, analyze the documents, and write a very clear opinion on the truth about the documents that were used in this case, and by extension the documents that […]

Our 4th President, James Madison was insistent on reminding everyone that in the end it is the vote of people that ultimately makes law in our Democratic Republic. Your vote does count even though there are forces trying to prevent you from voting and PR campaigns to convince you not to vote. * In the […]

Besides strict compliance with all appellate rules, lawyers must be in strict compliance with common sense. I know of no better way to immediately eliminate your chances on appeal than to assert abuse of discretion unless you have a situation that is shocking and stupid. Everything else comes under the heading of reversible error. […]

Originally published in October, 2008 this is a revised version of an article that correctly articulated the main weak points in the cases being presented for enforcement of mortgages and deeds of trust. Back then I made a few errors as to the actual duties of the trustee. I found out later that there were […]

Originally posted in November, 2008 this illustrates what happens when you destroy notes and then “recreate” them for purposes of claiming you have the original in court. The fact remains that neither of them had the original note because, as the Florida Bankers Association told the Florida Supreme Court, it was industry practice to destroy […]

Originally posted in September 2008, here is my update of issues that lawyers, regulators, judges and even borrowers have still not quite absorbed: Some time ago we mentioned on these pages that the auditors who certified the financial statements (KPMG, here) would come under intense scrutiny simply because they MUST have known, by simple common […]

Thursdays LIVE! Click in to the Neil Garfield Show Tonight’s Show Hosted by Charles Marshall and Bill Paatalo Call in at (347) 850-1260, 6pm Eastern Thursdays It’s not so easy to ascertain the name of the Plaintiff in foreclosure cases, where the Plaintiff is named as “U.S. Bank as trustee for XYZ Trust.” But the sanctions that […]

Perjury Law Defense Penal Code 118a & 118(a) Information regarding the crime of perjury is found at California penal code section 118a and 118(a). To prove that the defendant is guilty of perjury, the prosecutor must prove: The defendant testified, under penalty of perjury, in a court of law or on legal documents, and The defendant […]

Upon doing the deposition of Joeffery Long Wells Fargo I was amazed that they could be so blatant as against the California Homeowners Bill of Rights but then again it is Wells Fargo Joffrey Long rough draft Joffrey Long exhibits

Robert Wilbert | Latest News | April 29, 2017 The Debtor testified that RCS notified him that on June 1, 2016, Ditech would begin servicing the Note. A Ditech representative contacted the Debtor in June by phone and informed him that according to Ditech’s records, the Debtor was $2,000.00 in arrears on the Note. The […]

I would only add that none of the Trusts actually come to own the debt, loan, note or mortgage anyway. The creation of “assignments” and “powers of attorney” merely create the illusion of a transaction that never occurred. Rod Ciferri is licensed in New York State. I strongly recommend that lawyers read the following excerpt […]

By Tony Sarabia Published in Los Angeles Daily Journal January 3, 2013 Litigators often reach for doctrines such as res judicata or collateral estoppel to narrow the scope of a case. Res judicata prevents re-litigation of the same claim that was litigated in a prior case. Collateral estoppel prevents re-litigation of the same issue that […]

Getting the 50,000 or three times the actual damages (b) After a trustee’s deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to Section 3281, resulting from a material violation of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 292 […]

2920.5. For purposes of this article, the following definitions apply: (a) “Mortgage servicer” means a person or entity who directly services a loan, or who is responsible for interacting with the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note […]

2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or instrument, other than a […]

CIVIL CODE SECTION 2920-2944.10 2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or […]

Many of my readers are probably aware that California law allows commercial landlords to accept a partial payment of rent after service of a 3 Day Notice to Pay Rent or Quit and continue with an eviction action. This right to accept a partial payment after service of the notice is unique to commercial tenancies […]

On January 10, 2014 new RESPA rules went into effect concerning loss mitigation procedures. The new rules specify procedures a servicer must follow if a mortgage loan borrower requests loss mitigation assistance, such as a loan modification. The rules were drafted by the Consumer Financial Protection Bureau (“CFPB”). In drafting the loss mitigation requireme […]

CONSTRUCTIVE FRAUD: The tort negligent misrepresentation (also known as “constructive fraud”) requires that each and all of the following elements be proved: “(1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) [ […]

CONCEALMENT FRAUD: The tort of deceit or fraud by concealment requires that each and all of the following elements be proved: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally […]

PROMISSORY FRAUD: The tort of deceit or fraud by a false promise requires that each and all of the following elements be proved: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent at the time of making the promise; (3) the promise was made […]

PROVING FRAUD and or MISREPRESENTATION: DECEIT OR INTENTIONAL FRAUD The tort of deceit or intentional fraud requires that each and all of the following elements be proved: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable rel […]